Madhya Pradesh suffered from bumpy roads in its solar journey

For two separate projects, Madhya Pradesh state is witnessing delaying and associated losses. In one, ReNew Power has been slapped with $1.68 million fine for delays to a 51 MW PV project, and in another case, BHEL’s proposed 10 MW solar plant obstructed by state government.

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According to Mercom Capital, as of Q4 2017, Madhya Pradesh has installed approximately 1.3 GW of solar, and stands in seventh position among top states in terms of solar installations.

Madhya Pradesh (MP) state is progressive in solar and has one of the largest solar parks of India, Rewa Solar Park 0f 750 MW capacity. Recently, Madhya Pradesh Electricity Regulatory Commission (MPERC) has kept the must-run status intact for power generation from wind, solar, small hydro, and municipal solid. The renewable energy sources will not be subject to merit order dispatch principles.

In addition, announced in January this year, three firms, Mahindra Renewables, ACME solar holdings Pvt Ltd and Actis LLP’s Solenergi Power Pvt Ltd, has received a combined loan of $440 million from the International Finance Corporation (IFC) for developing the Rewa Solar Park in MP. All three developers will set up 250 MW capacity each in Rewa. Moreover, several other small projects are under developement.

However, it is not possible that every ride is smooth. Recently, the state has witnessed problems with two separate solar projects to be developed by ReNew Power Ventures Ltd and Bharat Heavy Electricals Ltd (BHEL) respectively.

ReNew Power fined with $1.68 million

Gurugram-based renewable energy developer, ReNew Power is fined with INR 110 million ($1.68 million) by the Supreme Court of India for delaying the commissioning of a 51 MW solar PV project by more than 210 days, the Business Standard has reported.

The project was part of the 300 MW power project, where ReNew Power won the portion of it at a tariff rate of INR 5.45/kWh. The rest, 249 MW, is won by Canadian solar developer SkyPower Global. However, state government has already cancelled the power purchase agreement (PPA) with SkyPower. Whereas, court has set aside the PPA termination, which MP government had initiated.

According to the termination letter issued by Madhya Pradesh Power Management Company Ltd (MPPMCL), the reason for the project cancellation is that both companies were failed to procure the land within the maximum permissible period of 16 months.

ReNew Power contested the PPA cancellation, first in high court, and in a commitment to install the power plant, it shifted the plant location. However, it delays the project further.

In a recent judgement form the Supreme Court, the statement says, “In our view, interest of justice would be met by directing respondent No.1 (ReNew Power) to pay a penalty amount of Rs 119,554,200 imposed upon respondent No.1 by the appellant.”

Moreover, citing the reasons of investing a huge amount in purchasing the land and development of the project at Ashok Nagar district, and the project was in the final stage of commissioning, the judge decides the termination of the contract would not be fair.

BHEL’s 10 MW project is going nowhere

The state-owned power equipment manufacturing company, is blocked by the MP government to set up the 10 MW solar PV plant next to its factory in the outskirts of the state capital Bhopal, the Business Standard has reported.

Despite receiving all the clearances from the central government, and sanctioning INR 540 million for the project, BHEL could not proceed with the project. This is because now the state government wants to keep the site, free for public and political events. The project deadline was March 31, 2017.

BHEL mentioned that it needs only 50 acres from 200 acres Jamboree Maidan site, owned by the company. Still, state government is not allowing it to set the plant, prioritizing for the other events. According to reports, the government proposed other sites and ask them to fed the generated electricity to the grid.

However, BHEL insists to set up the solar plant at the proposed site, as it will provide electricity to its factory and would save the company INR 150 million annually.

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Sraisth

Sraisth joined the pv magazine team in September 2017. He covers the Indian PV market and is responsible for the pv magazine India website.

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